incidental in the treaties. It has been traditional, I think, when we are talking about agreements which involve carrying out economic principles, that both bodies of the Congress should exercise their judgment upon them.

Mr. PEPPER. Mr. Chairman, will the gentleman yield?

Mr. CURTIS. I yield to the gentleman from Florida [Mr. PEPPER).

Mr. PEPPER. Mr. Chairman, I was interested in the gentleman emphasizing, as I understood him to do, that this is sort of an international agreement which requires the concurrence of both the Senate and the House; that is, the other body and this body. I am wondering if the able gentleman might share my opinion that the time may well have come when all matters of international significance vitally affecting this country, whether they be called treaties or executive agreements international

agreements, might not also be the subject of consideration by this body and the other body on equal terms, just as they consider other matters which are for the benefit of the country.

I propose to offer a constitutional amendment, as I did when I was a Member of the other body, to that effect.

A good example of this is the nuclear test ban treaty which the other body was no more particularly or peculiarly qualified to pass on than this body. Certainly this matter is vitally concerned with a subject of public significance. So I wondered about the historical reason for vesting in the other body the exclusive privilege of ratifying or advising and consenting to treaties and wondered if that had ceased to exist and if modern demands do not require that both bodies pass on treaties and on international agreements.

Mr. CURTIS. I want to applaud the gentleman for his contribution, because he is certainly directing this debate right along the lines I sought. I would like to emphasize this one point, that certainly in economic affairs the traditional technique is to use agreements rather than treaties and thereby permit this House as well as the other body to interpose its judgment-while the utilization of treaties eliminates the House of Representatives. However, the chairman of the Committee on Ways and Means and our ranking member, the gentleman from Tennessee, Congressman BAKER, have pointed out that in the House today we are confronted with a situation where this has already happened. That is the thing. The thing that caused me to have my views and I want to call attention to them, as additional views rather than minority views-was because I could not quite come to the point where it would be my recommendation as a member of the committee, to the House, that we turn this bill down. It does carry this proposition that the United States properly and constitutionally has entered into this treaty, and our problem here is the question of implementing it.

It does provide us an opportunity of making the point that I have already made, whether it should be this way, and then get into some degree of the substance that is involved here.

Mr. MILLS. Mr. Chairman, will the gentleman yield?

Mr. CURTIS. I yield to the chair

Mr. MILLS. There is much to be said for the gentleman's point. I think really that I would prefer, myself, that the House could be consulted about some of these matters and not always and forever be, as we were in connection with the International Coffee Agreement of 1940, the wheat agreement and the sugar agreement and in other instances, in the position of finding ourselves implementing something that has already transpired. But the facts are, as the gentleman points out, that the Constitution has been followed.

I wish the gentleman, before he gets to the details of this that disturb him as they do all of us, would comment briefly on what his reaction might be toward us in the United States if we fail to implement an agreement or a treaty to which we are a party. Our word has been given; we have made a commitment. I know those things concern the gentleman. I wish he would address himself to that point.

Mr. CURTIS. The gentleman in his very able fashion and wisdom has pointed his lance directly at the real chink in the armor of one who would oppose this measure that is before us; because that is true. My own view is only an additional one. I did vote this out of the committee and I think my judgment would lead me, for the very reasons the gentleman has stated, to acquiesce and probably vote for this bill, but not until I have set forth what I regard as being a very grave economic crime, and not before I point out the fact that the President of the United States has been talking one way, as is so often the case it seems, and acting in another.

And hopefully, by pointing some of these things out, the arbitrary power that still remains in the executive branch to implement this international coffee cartel will be directed more toward the area of economic freedom.

Mr. HOSMER. Mr. Chairman, will the gentleman yield?

Mr. CURTIS. Mr. Chairman, I would like to get to the substance of this matter, if I may.

Mr. HOSMER. Mr. Chairman, I thank the gentleman. So whether or not it is in treaty form or in agreement form, the Constitution of the United States places upon the legislative branch of our Government an equal responsibility to determine what in fact are the best interests of the United States and to take those actions that are required in pur

Mr. CURTIS. I might say to the gentleman that we might review the words of the Constitution, "advise and consent." This business of making the deal ahead of time and then just coming up for "consent," does not satisfy the requirement of "advise."

I think, Mr. Chairman, we might well pay attention to that.

Mr. MILLS. Mr. Chairman, will the gentleman yield at that point?

Mr. CURTIS. Yes, I yield to the gentleman from Arkansas.

Mr. MILLS. The gentleman from Missouri and the gentleman from Arkansas were not speaking in terms of something prospective. We were speaking in terms of something that has already transpired. Advice and consent have been given to the treaty.

Mr. CURTIS. That is correct. Mr. FINDLEY. Mr. Chairman, will the gentleman yield?

Mr. CURTIS. I yield to the gentleman from Illinois.

Mr. FINDLEY. Mr. Chairman, in addition to the problem of gaging reaction from abroad if we should turn down this act, for example, I think we ought to give some consideration to the reaction of the people here at home. I wonder what the gentleman's comment would be on the reaction of the American consumer if as a result of the agreement coffee prices should seriously jump up?

Mr. CURTIS. That is what I wanted to go into. Before we went into the Committee of the Whole and during the debate on the rule here, I requested unanimous consent to put in the RECORD additional matter, and I am going to put in the additional views which will be

Mr. HOSMER. Mr. Chairman, I am disturbed over the gentleman from Arkansas' mention of the embarrassment that might be caused from the failure of the Congress to implement an agreement made by the administration. As a matter of fact, in connection with the test ban treaty we were told that Congress should not even discuss the matter until the treaty was negotiated. Then there would be the opportunity in the other body to discuss it fully in connection with ratification, obtaining the consent of the Senate. Here we do not even have a treaty subject to ratification; we have an agreement.

Mr. CURTIS. No; this is a treaty. Mr. HOSMER. This is a treaty? Mr. CURTIS. That is the point; it has been properly signed and ratified.

Mr. HOSMER. In many cases that is not the case and discussion is necessary where you do have a treaty.

mittee report. In these additional views I pointed out three things, or tried to point out three things which I considered to be of importance.

First, that the overall policy in treating with trade matters is very bad. It is going toward a more regressive trade technique rather than freeing up trade. Instead of freeing up, we have been going to the international cartel technique, which is the worst approach we could use. We are going further away from the marketplace which is the traditional method in our society for trying to reach economic decisions.

Mr. Chairman, this in my opinionand it is only a part of this administration's entire approach and I tried to point it out in just a brief paragraphis just one of the instances of the operations of this administration which is moving away from the utilization of the marketplace as the method of reaching economic decisions and moving further

toward the point where it can be done through political bureaucracy of not only this country but of other countries.

That is where the deals can be made.

Mr. Chairman, the second point and one which the gentleman from Illinois mentioned a moment ago and which I think should be stressed is this: What about the American consumer? This is one of the ways where I think the President talks out of one side of his mouth and acts the other way. In the very letter that the chairman of the Committee on Ways and Means, the gentleman from Arkansas [Mr. MILLS] received from the President, which is in the report, he starts out with the expression that "the purpose is to check the disastrous decline in coffee prices by holding a floor under the prices." On the next page he states that "the result would be a beneficial and progressive increase in the coffee earnings of producing countries as coffee exports increase with rising world consumption."

Mr. Chairman, who is going to pay for this? The American consumer, of

course.

The point that I make in addition is that there is no benefit that the consumers in this country derive from increased productivity in the raising and distribution of coffee which the marketplace device would give to us. This is just the opposite approach to solving economic problems which has been traditional in our country. It is bad for the

consumers.

Then, finally, Mr. Chairman, I point out in my last paragraph that it is bad for the producers.

In the long run we do a disservice to the coffee-producing countries by these shortsighted cartel setups. This tends to keep them tied to a one-product economy instead of to encourage them in the development of a diversified economy from which comes sustainable economic growth and increased standard of living.

I think there is very little question about that. I would say that if we had had the wisdom to look into Cuba as a one-crop economy, one essentially based on sugar, and sought through our policies, to the extent we could to properly encourage them to diversify, we, perhaps, would not have the situation in Cuba today, nor would we have had the situation of Batista who preceded Castro.

Mr. Chairman, this is exactly the kind of foreign policy that produces and sustains the dictatorships in these countries. This is against the doctrine in which we believe of self-determination for peoples abroad.

ADDITIONAL VIEWS OF THOMAS B. CURTIS AND

BRUCE ALGER ON H.R. 8864 During the public hearings on the Trade Expansion Act of 1962, I raised the question of whether the administration policy was truly one of freeing up international trade or whether indeed it was not moving toward more restrictions by substituting licensing and quota arrangements for tariffs.

The present coffee treaty is just one more action in a series of actions taken by the Kennedy administration which lend support to this position. It is true that coffee like sugar and other raw commodities has been the subject of Government-sponsored cartels instead of the more liberal trade regu

lator, the tariff, for some time. However, there are no indications of a disposition on the part of the Kennedy administration to break loose from this most regressive of all techniques to regulate trade to move toward a freer marketplace. Where there were tariffs and no cartels, we now find cartels. Where there were cartels, we find more regressive cartels negotiated. Where there were no regulators, we find the administration advocating tariffs as in the proposal to impose

an excise tax on American investments in foreign securities.

President Kennedy in his special letter to the committee to reassure it in its concern for the American consumer talks one way and yet acts another. The coffee agreement is admittedly to keep up coffee prices; how then can the President argue that it is to

assure the American housewife the lowest

price for coffee? Nothing is said in the Presidential letter about passing on to the consumer in lower prices any benefits that may be derived from future increased efficiencies and increased productivity in the growing and distribution of coffee.

Finally, I would observe that in the long

run we do a disservice to the coffee-producing countries by these shortsighted cartel setups. This tends to keep them tied to a one-product economy instead of to encourage them in the development of a diversified economy from which comes sustainable economic strength and increased standard of living.

I share these views.

THOS. B. CURTIS.

BRUCE ALGER.

Mr. MILLS. Mr. Chairman, I yield 10 minutes to the distinguished gentlewoman from Missouri [Mrs. SULLIVAN].

ABUSE OF AGREEMENT CAN AND MUST BE

PREVENTED

Mrs. SULLIVAN. Mr. Chairman, as one who tries to keep the consumer interest uppermost in the consideration of legislation which affects the budget of the average household, it would be an easy thing for me to oppose this bill. I have always been suspicious of the priceraising efforts of some of the coffeeproducing nations, and have exposed and opposed those efforts on frequent occasions here in the House when they appeared to be based on misleading or false information about alleged shortages.

As a matter of fact, one of the most publicized speeches I ever made in the House occurred nearly 10 years ago, in my first term in Congress, when I reported that the spiral in coffee prices in late 1953 and the first few weeks of 1954 was apparently based on a downright hoax-a fake shortage. A subsequent Federal Trade Commission investigation confirmed this suspicion, and spelled it out in great detail, attributing the spiral to excessive speculation in coffee futures, manipulation in the coffee exchange, and a lot of hoarding, all growing out of deliberately misleading propaganda about crop disasters in Brazil.

Naturally, therefore, I am not enthusiastic about any plan or program to restrict the amount of coffee which can come into the United States from our major suppliers. If the supply is limited too severely, it will inevitably lead to a soaring price of coffee for the American housewife in the grocery store.

MANY FACTORS TO BE CONSIDERED However, there are other factors which we must also consider here today. The decision to have the United States par

ticipate in an international program to limit world marketings of coffee has already been made. It was made for us in an international agreement negotiated by the executive department and ratified by the Senate last May. The House played no part either in the negotiation of the agreement or its ratification. If the House had considered the agreement, I would probably have supported it-I saw more reasons to approve it than to oppose it. Primarily, I do not believe it is to the advantage of the United States, or of our consumers, to try to beat down the world price of coffee to the lowest possible level. possible level. I have often said that the cup of coffee so many of us love to drink would taste bitter indeed if we knew it came to us out of the misery of those who owe their livelihood to the growing of coffee. We believe in a fair price for what we buy as well as for what we sell to others. And this applies to coffee, too. Furthermore, starvation prices for Coffee would eventually discourage production and thus lead to much higher prices later.

So I think it was proper for the United States, as the world's largest consumer of coffee, to join in efforts under the United Nations to help the major producing nations to overcome the problems of huge surpluses, unrestricted marketings, and for green coffee. the possibility of disastrously low prices The International Coffee Agreement is aimed at such objectives.

UNITED STATES HAS POWER TO ASSUME
ADEQUATE QUOTAS

If it achieves its announced goals, it will achieve the stabilization of coffee prices-through quota restrictions-to the general level of prices in 1962. No one in this country would object to a stabilization of coffee prices at the 1962 level. My fear, however, is that the agreement may be permitted to succeed too well-by the establishment of quotas too low to meet demand at fair prices. If that happens, then the American consumer will pay a heavy price, indeed, for our generosity in wanting to help friendly Latin American neighbors, and other coffee-producing nations, to stabilize their shaky economies.

The point is, however, that abuse of this agreement does not have to happen. It will not happen if the American representatives on the International Coffee Council never lose sight of their obligations to American consumers as well as to foreign producers in the operation of the agreement and in the setting of policies under the agreement.

When the agreement was being negotiated, I raised numerous questions about the degree of protection to be accorded the American consumer against unwarranted increases in price. Under unanimous consent, I will place in the RECORD at the conclusion of my remarks the reply I subsequently received-a my letter to the Department of State and statement of official policy which later became an important exhibit in the Sen

ate debate on ratification.

This exchange of correspondence established the established the fact that under the agreement we do have significant powers in holding the price line through our

position in the International Coffee Council. Nevertheless, when this bill to implement the agreement went before the Committee on Ways and Means the legislation now before us-I submitted a statement which, for purposes of the record, I am going to insert under unanimous consent at this point in my remarks.

necessary, to express his concern for American consumers on any policies proposed under the international agreement. Such guidelines, I believe, should be included as a part of this bill, H.R. 8878, which requires that the United States enforce the quota restrictions set by the International Coffee Organization for coffee imported into this country.

STATEMENT BY CONGRESSWOMAN LEONOR K. SULLIVAN, OF MISSOURI, SUBMITTED TO THE

8378, A BILL TO CARRY OUT U.S. OBLIGATIONS UNDER THE INTERNATIONAL COFFEE AGREEMENT, OCTOBER 15, 1963

Chairman MILLS and members of the Committee on Ways and Means, many persons familiar with the fight I waged in 1954 against unconscionable increases in coffee prices to American consumers as a result of an alleged but nonexistent shortage of coffee supplies were surprised this spring that I did not oppose Senate ratification of the International Coffee Agreement. I explained, however, that I was not opposed to any reasonable effort and reasonable machinery to stabilize prices for the producers of green coffee, just so long as such a program did not lead to sharp increases for consumers in case the chronic condition of oversupply should suddenly turn into a shortage either a real shortage, or the fear of shortages such as

occurred in 1954.

While the agreement was still being negotiated, I wrote to the Secretary of State on September 13, 1962, and expressed my concern on this point. I wanted to know what safeguards were being written into the agreement to protect American consumers in case the price should begin to skyrocket.

A reply from Assistant Secretary of State Frederick G. Dutton, dated October 3, 1962, advised me that the purpose of the agreement, as it was being drafted, was to assure that "the general level of coffee prices does not decline below the general level of such prices in 1962." In other words, if the green coffee price could be held, roughly, to the 1962 average price-which was not an excessive one-the purposes of the agreement would be served.

Mr. Dutton's letter described some of the features of the agreement which he said could be utilized to prevent marked upward changes in green coffee prices, and also noted that the United States, in effect, had a veto on any quota decisions which could cause unconscionable increases. As a last resort, he said, we could withdraw at any time, after 90-day notice, and our withdrawal would cause the agreement to collapse, since the United States is the world's largest importer of coffee.

Mr. Dutton's letter was an important State Department exhibit in the discussions in the Senate on ratification of the treaty in May. When I saw the letter to me reprinted in the Senate ratification debate in the CONGRESSIONAL RECORD of May 20, I then placed in the RECORD the next day the full exchange of correspondence, and the misgivings which had prompted me to write to the State Department while the agreement was being negotiated.

Now, in considering legislation to implement the agreement, I think we must make absolutely certain that the program, in actual operation, protects the interests of American consumers fully. Once the agreement is in full operation, I don't think we would want to withdraw from it hastily, or veto the decisions of other participating countries, because of the consequences of such steps on our relationships with friendly nations. But I think the Government of the United States has to be provided with strong congressional guidelines which will enable our representative on the International Council to speak forcefully, when

sure adequate supplies at fair prices for American consumers.

In addition, the legislation should also provide for immediate increases or readjustments in coffee quotas in case of any increases in consumer demand.

There is another important problem here. The coffee-producing nations have been experiencing great carryover stocks from year periencing great carryover stocks from year to year, and annual production surpluses almost every year in relation to demand. But if the International Coffee Agreement really works effectively to cut down production and to reduce surpluses, then any sudden disaster-such as the great fire in Brazil this year following a serious drought, or a great hurricane, or a crop failure for any reason-would immediately set off a kind of panic in the world's coffee markets, and the American consumer would find the price going up the very next day in the grocery stores. Even with the huge surpluses in Brazil, the recent fire was cited as a reason for price increases.

Furthermore, a political upheaval in any of the large producing countries, could also set off a wave of speculative frenzy, if surpluses were reduced. Instead of being satisfied with stabilizing prices at the level of 1962, the producing nations, I am sure, would much rather see the level of 1954 regarded as "normal." The 1954 price was an unconscionably high one, based on fake shortages, manipulation, and excessive speculation in the commodity exchange, and vast hoarding of supplies in fear or expectation of further increases in price. This was brought out in the Federal Trade Commission report on the 1954 coffee spiral.

If we are going to put the full majesty of the Government of the United States behind a program to limit the amount of coffee we can bring into the country, so as to help producers abroad, then we must show equal concern for the protection of the American consumer against natural disasters, political upheavals, or other developments in coffee-raising areas which could bring a return of the 1954 experience.

Therefore, I believe that this bill, intended to require us to carry out our obligations under the international agreement, should also contain language making it clear that the producer countries have obligations to us under the agreement which must also be

carried out.

We cannot use this bill as a device to amend the treaty, of course, but we can certainly tie our performance in enforcing the quotas under this bill to a clearly expressed congressional mandate (1) that the quotas must be adequate to meet the needs of our consumers at fair prices; (2) that the quotas be readjusted promptly if consumer demand in this country should rise; and (3) that some effective sanction-perhaps monetary damages or else a suspension of the quota enforcement machinery-be provided at any time U.S. import quotas are not met under the agreement.

I leave to the experts on this committee the technical problem of drafting language to carry out these obligations of the United States to the American consumer as part of a bill "to carry out the obligations of the United States," under a treaty designed primarily to help coffee producers abroad.

MUST NOT BE "BACK-DOOR FOREIGN AID"

I felt that the Congress must definitely and unequivocally go on record as insisting that the American representatives in the operation of the international agreement should and must speak affirmatively and effectively on behalf of the American consumer. And here is why I felt so strongly on that point:

The Department of State is deeply and properly concerned about the economic stability of friendly nations, and particularly those which are menaced constantly by communism. Under the Department's overall direction, we pour out billions of dollars in military and economic aid to such nations. The aid program is constantly under attack in Congress and in the press and elsewhere. It is not now, and it never was, a popular program. We know that it has been generally effective, but it is costly.

On the other hand, an increase of a few cents in the price of green coffee imported into the United States means a hundred million dollars or more in dollar exchange to Brazil and other coffeeexporting nations. From the State Department's viewpoint, this would be a painless transfusion of financial aid without being reflected in any appropriation bill. It would be reflected only in "a few cents a week" in the budget of the average household. How simpleand how easy.

But how unfair to the American consumer it would be if the representatives of our own Government were to lend themselves to an attempt to artificially raise coffee prices as a backdoor device for aiding the economies of other nations. Unlike our aid programs, we would have no means of assuring that the financial help actually went to the countries and to the groups within those countries which needed our help. And, frankly, there have been numerous occasions when higher prices for green coffee paid by the United States, and passed on to American consumers, meant no improvement whatsoever in the living standards of those who grew the coffeeinstead the extra money went to speculators and to the already very rich in those countries.

A LOOPHOLE IN BILL ON PRICE INFORMATION

Hence, Mr. Chairman, my statement to the Ways and Means Committee, and the suggestions I made for improvement of the legislation, were based on a desire to guide our own American policy-to give it a clear and unequivocal American orientation-in our participation in the agreement.

I am more pleased by the manner in which the committee attacked the problem-and the long consideration it gave to this matter. I could not ask for a fairer review. The letter from President Kennedy to the chairman of the Committee on Ways and Means makes it clear that the administration will be guided by the considerations I asked be stressed. I also have State Department assurance on that point. If for any reason the agreement leads to excessive prices, we have a way out-withdrawal after 90 days' notice and we can reconsider the entire matter in the next Congress in any event when this bill

expires. Under the circumstances, I am willing to go along.

But this bill still leaves a loophole which I intend to close through an amendment I will propose when the bill

is opened for amendment. As a result of the committee's consideration, the bill has been amended to require the President to report annually on the operations of the agreement, particularly with regard to the general level of coffee prices. Under another section of the bill, he is empowered to require the submission to him of relevant information by the coffee trade on the importation, distribution and consumption of coffee. But while he has the obligation to report to Congress on the general level of prices of coffee, he is not specifically given the authority to require the submission of this information to him by all those in possession of important information on prices. My amendment will add this clear-cut authority. I shall explain the need for it in more detail when the amendment is offered.

The correspondence referred to above is as follows:

CONGRESS OF THE UNITED STATES,

HOUSE OF REPRESENTATIVES, Washington, D.C., September 13, 1962. The Honorable DEAN RUSK, Secretary of State, State Department, Washington, D.C.

DEAR MR. SECRETARY: Ever since I raised an alarm over runaway coffee prices in the United States in 1954, setting off a Federal Trade Commission investigation which disclosed widespread evidence of speculative price excesses and futures trading irregularities, I have been attempting to keep in touch with developments in this field which might foreshadow possible gouging once again of the consumer. Just recently, I called the attention of the House, and of the housewives of the country, to a news report from Brazil implying that some frost damage to the new crop would, or might, result in higher coffee prices in the United States. I warned that any wholesale or retail price increases based on such a scare story would be utterly unjustified, in view of the tremendous stocks of coffee on hand.

My purpose in writing to you is to do two things: First, to assure you and your aids that my concern is directed primarily at unwarranted increases in coffee prices based on false reports and speculative excesses, rather than on any opposition on my part to any reasonable international program for stabilizing coffee prices at prices which are fair to both producers and consumers; and, secondly, to ask what safeguards are being written into the proposed international agreement which would serve to protect the American consumer in case crop controls and other measures should result in inordinately high prices to the American consumer.

We have long followed a policy in this country of encouraging reductions in farm production when prices are ruinously low, so I do not subscribe to the idea that any attempt to stabilize coffee prices for Latin American producers is necessarily a disservice to the American consumer, particularly if it should mean any substantial improvement in incomes and living conditions for the people of Latin America, and thus a reduction in the amount of aid we would have to give there.

On the other hand, it has been the sad experience of the American consumer in both World War II and Korean war days that after having gladly cooperated in building a floor under farm prices, the consumer was denied any effective ceiling over those same prices

once inflation became virulent. I fear that if a stabilization program should be adopted for coffee, it would require our consumers to support the idea of a floor under coffee prices, but would give them no protection

over excessive increases if unexpected circumstances should precipitate sharp increases in price.

Perhaps this matter has already received departmental consideration, and the necessary safeguards have been included in the draft agreement. If so, I would be glad to know about it. If not, I certainly trust some

proviso is included to permit reasonable re

straints on excessive price rises as well as on excessive price declines. Since we are the biggest customer-country involved in the negotiations, and since the American consumer will largely pay for the international stabilization program in terms of higher prices for coffee in the stores, I think our

consumers are entitled to the kind of consideration I have outlined.

May I have your thinking on this.
Sincerely yours,

LEONOR K. (Mrs. JOHN B.) SULLIVAN,

Member of Congress, Third District, Missouri. DEPARTMENT OF STATE,

Washington, October 3, 1962. The HONORABLE LEONOR K. SULLIVAN, House of Representatives.

DEAR MRS. SULLIVAN: I want to thank you for your letter of September 13, 1962, addressed to the Secretary, with regard to the new International Coffee Agreement which is now before governments for consideration. I am sorry that our reply is somewhat tardy; our workload in the closing days of this Congress has been exceptionally heavy.

At the beginning I want to say that the officials of this Department concerned with the coffee problem are sincerely appreciative of the constructive view you have taken in this matter. Accordingly they want me to assure you that they have been mindful throughout the long negotiations with foreign governments that our first duty is to protect the American consumer. The advisory committee appointed by the National

Coffee Association to work with the State De

partment during the negotiation of the new coffee agreement has, of course, always maintained that the U.S. consumer must be protected in any coffee agreement. Toward this common objective we have managed to secure a number of provisions in the new agreement which should fully protect our interests.

Before describing these specific provisions, it is noteworthy that the tremendous stocks of coffee now held by Brazil and Colombia would seem adequate assurance that no substantial advance in green coffee prices could be sustained in the foreseeable future. Stocks are also building up in some African countries, and present productive capacity everywhere is in excess of any likely demand over the next 5 years. Thus the supply-anddemand situation as presently known argues against any marked increases in coffee prices.

The new International Coffee Agreement does not have any specific price objective in the sense that it will endeavor to maintain prices for the various kinds and qualities of coffee at certain cents-per-pound figures. It does provide that through the fixing of quotas, the members agree on the necessity of assuring that the general level of coffee prices does not decline below the general level of such prices in 1962. We consider this price objective a realistic one in view of the burdensome stocks overhanging the market. In the light of the price trend it is also a reasonably modest one, as coffee prices have been declining steadily in recent years. During the first 8 months of 1962 the price of Brazilian coffe averaged about 34.3 cents a pound, compared with 36.6 cents in 1960 and 48.4 cents in 1958. The decline set in immediately after 1954, when you will remember

the severe frost damage in Brazil resulted in prices averaging 78.7 cents per pound.

Consumer protection against any unwarranted price increases is assured by a number of specific provisions in the agreement.

Probably the most important are the provisions relating to the establishment and adjustment of export quotas. Export quotas are intended to control the amount of coffee that may be made available to the market by the producing countries during a given period, and thus they directly influence the price. The agreement provides that all decisions on the establishment and adjustment of export quotas shall be taken by a distributed two-thirds majority vote; i.e., a concurrent two-thirds majority of the importers and exporters voting separately. As the United States has 400 votes, this, in effect, gives us a veto power over decisions of the Council. We would, to make the veto effective, need only one other importing country voting with us. The number of votes held by it would be of no consequence as we alone have more than one-third, but it was felt desirable to provide that one country alone could not exercise a veto. We cannot conceive of any situation in which the United States advocated a veto where we could not persuade at least one other importer of the merit of our position.

In addition to the voting provisions of the agreement with regard to export quotas, two other provisions are noteworthy, in that they specifically recognize the undesirability of marked changes in coffee prices for whatever reason, and provide for corrective action under voting procedures which are easier to attain than the standard procedure of a distributed two-thirds majority. These two provisions are quoted below for your information:

"(5) All members recognize that marked price rises or falls occurring within brief periods may unduly distort underlying trends in price, cause grave concern to both producers and consumers, and jeopardize the attainment of the objectives of the agreement. Accordingly, if such movements in general price levels occur within brief periods, members may request a meeting of the Council which, by distributed simple majority vote, may revise the total level of the quarterly export quotas in effect.

"(6) If the Council finds that a sharp and unusual increase or decrease in the general level of prices is due to artificial manipulation of the coffee market through agreements among importers or exporters or both, it shall then decide by a simple majority vote on what corrective measures should be applied to readjust the total level of the quarterly export quotas in effect."

In the unlikely event that unforeseeable circumstances might arise in the administration of the agreement which would operate against the interests of our consumers or our coffee trade, the United States could always withdraw from the agreement. It is provided that any government, after September 30, 1963, may withdraw by giving written notice, such withdrawal to be effective 90 days after notification. As the agreement would collapse without our participation, this possibility is the final assurance that our views on the operation of the agreement must be respected.

If I can be of any further assistance in furnishing information please do not hesitate to let me know.

Sincerely yours,

FREDERICK G. DUTTON,
Assistant Secretary.

Mr. MILLS. Mr. Chairman, would the gentlewoman yield?

Mrs. SULLIVAN. I yield to my distinguished colleague, the chairman of the Committee on Ways and Means.

Mr. MILLS. First, Mr. Chairman, I want to congratulate the distinguished

gentlewoman for the intensive study she has made of this overall matter and to thank her for the suggestions she made to the committee while this particular bill was under consideration by the committee. I know of no one who has spent more time than the gentlewoman from Missouri in trying to protect the housewife against undue consumer price increases.

Mr. Chairman, if the gentlewoman would continue to yield, I had thought that the matter she would like to have inserted in the bill was already, perhaps, covered in paragraph (3) of section 2 of the bill where we say:

(3) To require the keeping of such records, statistics, and other information,

We have not referred to statistics involving prices. Because this is important and because it should, perhaps, be set forth specifically, so far as I am concerned I am going to, when the gentlewoman offers her amendment, say that I have no objection to it and ask that it be accepted.

However, I would like to point out just one thing in connection with it which I am sure is agreeable to the distinguished gentlewoman and that is that it is not intended by her amendment to authorize the publication or release of confidential business information from the private records of individual firms in the coffee business in the United States. We would not want to go that far; would we? Mrs. SULLIVAN. That is right. I thank my distinguished colleague. I do want to put this amendment in its proper place.

The CHAIRMAN. Under the unanimous consent previously obtained in the House, the correspondence and other material referred to by the gentlewoman from Missouri [Mrs. SULLIVAN] will be included at the appropriate place.

The Chair recognizes the gentleman from Tennessee [Mr. BAKER].

Mr. BAKER. Mr. Chairman, I yield 10 minutes to the gentleman from Texas [Mr. ALGER).

Mr. ALGER. Mr. Chairman, I realize in view of the debate today that it is necessary that I give what now appears to be a minority report. I wish I had it to do over again-I would have written such a report. I presume, because it has come before us, even though there is a treaty which was ratified and which we must implement, the very fact that it is before us means we must have the

right legislatively to disagree. I know

of no other way to disagree, despite the fine speeches, than to so cast my vote, as I shall do today.

The chairman has said that this is a simple bill, and relatively speaking it is, indeed, compared to the normal trade bill that we bring before you.

But this is far reaching and it is one of the things that caused me to take the floor so futilely last year on the Trade Assistance Act of 1962 to point out that we were walking into the trap of cartels and quotas and limitations on trade, which would not free up trade but, rather, tighten it. As I stated, that was the duplicity in the President's statements on the Trade Assistance Act last year in 1962.

Now, specifically I want to mention several things and try to be most brief in pointing out rather categorically another viewpoint and quite a different view than the ones that have been presented here today. It is true, I join with the gentleman from Missouri in the with the gentleman from Missouri in the additional views that you will find in the back of the report, but I would like to go further and state what this bill is, as I see it, compared to what we should have in six or seven categories.

First, this bill is international control rather than the competition that should exist between people who import and exist between people who import and export freely in a free market. This presumes that there is not such a market in the world and that governments must control internationally. I categorically reject that viewpoint and do not want to be a part of such an arrangement.

Secondly, this bill is trade by governments agreement-one government and another. We have the votes and all of the other mechanisms set up to make this agreement work, including our own withdrawal, which, of course, is a necessary protection, in 90 days. Instead of having the market agreements between governments, we ought to have, as I see it, the market forces of supply and deit, the market forces of supply and demand at work. I know this is very oldmand at work. I know this is very oldfashioned, but I thought that was what free trade was or what freer trade was directed toward. Freer trade means the free interchange of exports and imports free interchange of exports and imports with possibly only somewhat restrictive tariffs. But tariffs permit the flow of goods, and we try to lower those tariffs goods, and we try to lower those tariffs when we can. This bill today, of course, is much the contrary. is much the contrary. It is much tighter control by quotas.

Thirdly, this bill is price control. I know no one who can contradict that. I happen to believe in fluctuating prices I happen to believe in fluctuating prices set by the market forces of supply and demand.

I would like to call attention to the report, on page 2, in which it says:

The purpose of the treaty is not to raise coffee prices but to prevent those prices from declining below the general level prevailing

in 1962.

Oh, what a subtle way to put it. No, they are not going to raise prices, but as our background material will show as our background material will show us this legislation is intended to arrest any downward trend. In other words, you can count on there being no price you can count on there being no price reduction, and that is another way of saying prices will be higher than they saying prices will be higher than they might have been to a form of raising prices, of course. To me it is a little too subtle a way to put it. Of course it is a price control bill, and I happen to believe in free pricing, as to reflect the free lieve in free pricing, as to reflect the free market operation at least, with the forces market operation at least, with the forces of supply and demand.

Then we find on page 3 of the report in the President's letter-and here I accuse the President of duplicity in this letter, and I want that clear, even if I am solely responsible for saying that, because he says:

The purpose of the agreement, which I fully endorse, is to check the disastrous decline in coffee prices that began in 1955, by holding a floor under these prices at the general level prevailing in 1962.

And on the next page he says:

I want to assure you this administration intends to protect fully the interests of the American consumer.

My colleagues, you cannot do both. Yes, you can put a floor under prices and hold them where they are, but you are not protecting the consumer if the prices otherwise were to drop. You cannot have it both ways. At least, that is my view and I believe I am entitled to it.

Next, as to the matter of imports, I am sure you realize you have to have certificates of import as to the coffee being brought in. I happen to be for freer trade. This is not freer trade. So again categorically I must reject this concept of freer trade. It is not freer trade. It is rigid control.

Now, as to foreign aid-and foreign aid again subtly enters into this bill-we were told several times in committee

Mr. BECKER. Mr. Chairman, will the gentleman yield?

Mr. ALGER. I yield to the gentleman from New York.

Mr. BECKER. I want to congratulate the gentleman from Texas, and agree with him.

While the gentleman is talking about foreign aid, I would like to call his attention to a statement the President made in his news conference today. The President said that he did not feel it was wise to use the threat of withdrawing foreign aid too frequently. He said if threats of withdrawing foreign aid are used too often, there would be a great temptation on the part of the recipients to say, "Go ahead and cut it off."

Will the gentleman say this would be bad?

Mr. ALGER. I think it would be very refreshing if we suggested the withdrawal and they took us up on it and reaffirmed their self-respect, which they must surely lose when they take our money. Of Of course, they have been shaking Uncle Sam's money tree to get something for nothing. I wish some of the foreign countries would tell us to keep our money.

Mr. BECKER. Let me say that I agree with the gentleman.

Mr. ALGER. As to foreign aid, we have been told that we are going to have to spend more money in foreign aid if we do not pass this bill. We have to be for this, we are told, or else we have to be for more foreign aid. I reject that categorically. It just is not so. I hold it to be just the reverse. The $100 bil

lion plus a few billion given away since World War II has not solved the problems. It has created and increased our problems. We are giving it all away and

failing to accomplish our goals. I am for less foreign aid, not more. I do not want this bill to be used as a blackjack or as coercion to make me go along with bad legislation. I am not in favor of giving them more foreign aid.

They tell us that this bill will increase South American income and provide a higher living standard. We are all for that. This bill will not do that. We can do it through my next point, which is capitalism. Why can we not rely, for a change, after so many decades of welfare statism, on the capitalistic market,